Ceta has launched four rent guarantee solutions for intermediaries to assist landlord clients through the upcoming Renters’ Rights Act.
Ceta said the law had “significantly increased income risk for landlords” and the impact was already being felt.
The Renters’ Rights Act comes into force on 1 May and will remove landlords’ ability to enforce no-fault eviction Section 21 notices, and they will only be able to evict tenants on Section 8 grounds if they are three months behind on rent.
The insurance broker said the average time to possession had already increased to 27 weeks and landlords were experiencing at least four months of rental income loss before Section 8 proceedings began.
It said rent guarantee claim durations were expected to rise between 75% and 100% and legal expenses volumes by 150% to 200% over the next few months.
Ceta said this had made high-quality, responsive rent guarantee protection even more important, adding that 76% of landlords said they would seek cover because of the act.
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The premiums on the products start at £110 and include a 12-month product with zero months of excess, a 12-month product with two months of excess, and corresponding 18-month options.
The product is underwritten by Addept and each product includes £50,000 cover for legal expenses.
James O’Hara, commercial director at Ceta, said: “Having the right protection in place against unpaid rent and tenant disputes is more important than ever. Standard six-month cover is no longer sufficient; cover of 12-18 months is more aligned to the current possession timelines facing landlords, because of the potential for longer arrear thresholds and significant court delays.
“We’re therefore delighted to lead the market by providing intermediaries and their landlord clients with a range of flexible cover options that ensure cover remains accessible and aligned to the real-world impact of these far-reaching legislative changes.”
Richard Finnan, managing director of Addept, added: “Private sector landlords are facing significant disruption as a result of the act. We’re delighted to support Ceta as they bring to market products designed to mitigate the legal risks and protect against rent arrears and repossession costs.
“It’s great to work with partners who, like us, have the expertise to move quickly and help intermediaries respond to the changing risk and regulatory environment of today’s rental market.”